Plans to pay GPs a £55 bonus when they make a dementia diagnosis have been condemned as an "ethical travesty".
NHS England confirmed family doctors would receive the cash under a new scheme to ensure sufferers are identified early and given tailored care.
But Dr Iona Heath, ex-president of the Royal College of GPs, told the medical magazine Pulse: "I think the proposal is an intellectual and ethical travesty."
Health experts believe that just under half of the people living with dementia are not being diagnosed.
Under the scheme, GPs will get the cash for every additional dementia diagnosis they make over the next six months.
Dr Martin McShane, NHS England national director for long-term conditions, said: "Dementia can be devastating both for individuals and their families.
"We know that more needs to be done across the health service to ensure that people living with dementia are identified so that they can get the tailored care and support they need.
"This additional investment is part of a drive to ensure this."
Health chiefs have identified a gap of about 90,000 patients, an average of 12 per practice, who could benefit from a more timely diagnosis.
However, the Patients Association say the scheme is "a distortion of good medical practice".
Chief executive Katherine Murphy said: "We know GPs receive incentive payments to find all sorts of conditions, such as high cholesterol, raised blood pressure and diabetes - but this seems a step too far. It is putting a bounty on the head of certain patients.
"Good GPs will be diagnosing their dementia patients already. This seems to be rewarding poor GPs.
"There is an issue of people presenting late with dementia to doctors, but this is not the right way to go about tackling that.
"If people were given hope that something could be done, that would be the greatest incentive for coming early."
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